My Dollar Buys as Much as Your Dollar – Do You Care?
December 26, 2021 – I cannot help but feel the million cuts of micro-aggressions whenever I ask myself this question. If my dollar is worth as much as your dollar, then why do you spend so much less reaching out for my business? I write today as much a Hispanic consumer as I am a marketer to my community.
Those of us veterans in multicultural and US Hispanic marketing have always wondered why shares of marketing advertising dollars are not proportionate to our shares of the population. Various publications and trade organizations have all come up with their estimates of total marketing spends and multicultural marketing spends across major consumer segments. For the sake of this blog, I’ll make the following assumptions based on past reports by the Association of National Advertisers:
- Overall Marketing Spend in US = $150BB (total)
- US Hispanic Marketing Spend = $5.4BB (3.6% of total)
- Total US Multicultural Spend = $7.8BB (5.2% of total)
Given that Hispanics in the US represent 20% of the population, the disparity in marketing investment should be alarming to any advertiser hitting his or her head against the wall perplexed at how to grow revenue. If you factor in African and Asian-Americans that percentage grows to 36% and the inequity makes you wonder what the hell is going on?
So maybe we should look at this from another perspective:
Marketing Dollars Per Capita
- Total Marketing Spend per Person in the U.S. = $461
- Marketing Spend per Non-Multicultural Person = $729
- Marketing Spend per Hispanic Person = $96
- Marketing Spend per Multicultural Person = $65
What we see here is marketers undervaluing minority consumer segments. They spend almost 5x less on Hispanic consumers than they spend on the total market. 7.5x less compared to white consumers. And over 11x more on non-multicultural consumers than on persons of color.
These are of course very broad averages. We can only imagine the inequity by industry if we start to break down addressable markets by category. Above my paygrade. But it is a question every CMO should be asking because it defies logic. I cannot think of any product or service that costs me, as a Hispanic, 5x -11x less. Nor can I imagine that testing the Hispanic market would result in 5x -11x less ROI.
A few adjectives immediately come to mind – saturation, overspend, waste, opportunity cost, marketing deserts, inertia, lack of imagination, and more. But there are perfectly “reasonable” explanations for the concentrated burning of ad dollars.
Bandwidth – I suppose this is related to the well-documented lack of diversity in most corporate marketing operations. “We don’t have the people to do this, and you know, we like to do things right.” What they mean is that they do not have “right” people to get the job done and ultimately decide it is more efficient to put off to next year.
Addressability – This excuse usually relates to assumptions about what products and services Hispanics can afford to buy. “The price point is too high for the market.” I would never argue that every product is accessible, relevant, or even desired by Hispanic consumers. But I would argue that one-in-five Latino consumers probably represents a viable market for most products and services.
Platforms – There are only five major Spanish-language broadcast television networks, 60 cable nets and 400 radio stations. Compare this to the hundreds of channels on any cable system and tens of thousands of hours across various AVOD platforms. “There is only so much I can buy.” This is a chicken and egg rationale. The entire advertising ecosystem is driven by demand. What would the Spanish-language marketing industry look like if it were fueled by budget allocations proportionate to the population?
Assimilation – This is likely the touchiest of all rationales. “They need to assimilate and learn English.” Not only is this ignorant; it is self-destructive. Retail cemeteries are littered with examples of companies who did not evolve with the demographics of this country – think Sears, K-Mart, Montgomery Ward and countless others. I bring up these retailers because they represent the tip of the spear, dragging along tens of thousands of SKUs with them.
From our perspective, these are all rationalizations. You will not know the impact the Hispanic market can have on marketing ROI and revenue growth until you test it. Bandwidth can be outsourced. Addressability is almost assured. The platforms are in place and assimilation is a non-issue. Virtually all multicultural consumers, immigrants, residents and citizens actually see the brands they buy and the services they use as our yellow brick road – an aspirational path to blend in and succeed in this country.
It is time to stop the insanity of hyper spending on the consumers you already have and start to invest in the acquisition of customers who will most definitely drive your growth in the future. My dollar buys as much as your dollar – do you care?
For more discussion about the U.S. Hispanic Consumer Market, check out the infographics in our APPROACH section on our website, www.d2hispanic.com
Marcelino Miyares, Jr – Managing Partner – D2H Partners, LLC – 2021
About d2H Partners – Los Angeles based full-service Hispanic Advertising Agency focused on D2C and B2B Spanish language campaigns targeting immigrant, first-generation and “billenial” Hispanics. d2H specializes in creating, adapting, and delivering targeted messages to Latinos to profitably enculturate your message, media and metrics.